FISCAL: Surrender

For months the U.S. Treasury and the Federal
Reserve Board have been squabbling over the Treasury's cheap money
policy. The Treasury, which wants to keep down the cost of carrying the
$257 billion national debt, wanted to keep interest rates where they
were. FRB wanted to raise them, to help check inflationary spending.
Last week FRB won.

The Treasury announced a new $8 billion issue of five-year notes at
1¼%, or ¼% higher than the rate on its last big long-term issue last
August (TIME, Sept. 4). Since the rate on Government bonds largely
determines what private interest rates...